Our long pending analysis and the most sought analysis is Gold . True, people are worried at uncertain times and economic scenario's around them, so they want to analyse whether Gold will be safe security for part of their investments. Before we go into analyzing the Xauusd , Be clear about the fact we are building a case with our analysis considering various economic factors.While driving car we look at traffic, speed limit,weather (Fog or rain) etc not just the destination. So we are analyzing with Global scenario's,News Events, Fed rate hikes & more.

What do we see in the chart above ? Broadening Wedge Ascending Pattern which usually breaks to downside, rarely it moves up. Check out My posts on AUDUSD and USDCAD you will know how this pattern worked in the past. For sample, I'm attaching Aussie, for usdcad post check in my public profile.

Above chart is not one time instance, I can show you more charts for this broadening wedge working in same manner breaking downside and moving up after the breakout. So Gold is expected to give the breakout before Fed meet & move below 1200's, with Fed rate hike ( 80% probability for rate hike) Markets will move in knee-jerk reaction with few session wicks going below 1175's barely kissing 1150;s or staying above during that time. After the dust settles down, Gold will move up as it will be considered as safe asset.

So in next 3 weeks DXY will reach 103's and will move down when Fed rate hike is announced. We knew Sell the News which is insync with the post. The upside move for rate hike is already factored in , so the reversal on cards.When it moves down again Gold is sought as safe asset for investment.

Apart from all these, We don't know clear picture of Trump's policies ( Economic especially), by Jan'17 we will get an idea what he is about to do, which will be definitely perceived as bad for Global economy because any change in stable policies is not accepted with cheer.

When US markets go down what will markets around the world will do ?? Go Down. I can show the same pattern in many scrips.

But these uncertainty around the markets are enough for markets to go down & What's the safe asset ?? Gold ! Investing in this precious metal, demand will go up and Gold prices will rise. Only if something real good happens for whole global economy it will remain below 1200's,else we will see 1360's level in Gold from 1175's.
Now you might have realized Why its multi-factor analysis.

@DigitalNomad, Only on fed interest rate hike scenario , uncertainty sets in & with a bounce from 1175's level we will move up. Probably we can range for few days around 1190's to 1210's n move up, its just one of the possibilities and we are ready beforehand if that happens.

thank you for your detailed analyisis. what IF there will be no rate hike (which seems pretty likely to me, bec. of global debt, esp. US), and markets start to appreciate trumps policy (where is crisis and usd weakness?). additionaly it seems that gold isnt cheap enough yet for someone (china, ecb).

@sbrudermann, The other side of the coin, sure bcos of the scenario's stated by you Feds can postpone the rate hike ( giving surprises there hobby ) and if market appreciates trump policy we will see gold around 1050's for sure, No doubt in that. But breaking 1050's will depend on other global factors.

@Ching25, Yes the same. We can see a down break till 1175's ( buffer zone for fed rate hike volatility 1150's not more than that ) then we will see 1360's in future but that will be with pullbacks. Check with your trade plan before taking the trade :)